Taxes on Buying a Home in Spain as a Non-Resident: A Step-by-Step Guide

Buying a home in Spain is one of the most common moves among foreigners who relocate, invest, or simply want a place in the sun. What many don’t anticipate is that the tax obligations don’t end at the notary’s office: there are taxes due at the time of purchase, taxes paid every year while you own the property as a non-resident, and a third set that kicks in the day you sell. This guide walks through each of those stages step by step, always using the official name of the tax or form so you can recognize it on an invoice, a notice from the tax authorities, or in conversation with an advisor.

Before any of this, you’ll need a NIE (Foreigner Identification Number), the tax ID that Spain’s tax agency — the AEAT (Agencia Estatal de Administración Tributaria) — requires of any foreigner who buys, sells, or earns income in Spain. Without a NIE, there’s no signing a deed.

At the time of purchase: ITP, or VAT plus AJD?

The tax you pay when buying depends on whether the property is a resale or new-build, and the distinction matters because it changes both the rate you pay and who administers it.

If you buy a resale home from a private seller, you pay ITP (Property Transfer Tax), a tax devolved to Spain’s regional governments: each region sets its own rate on the purchase price (or on the cadastral reference value, if higher), so the rate can vary noticeably depending on where you buy. It’s self-assessed within a few weeks of signing, using what’s known as Form 600.

If you buy a new-build property directly from the developer, the transaction instead carries VAT (value-added tax on housing) plus AJD (Stamp Duty), a tax on the notarial document itself that is also set by each region. VAT is charged by the developer on the invoice; AJD, like ITP, is self-assessed separately. ITP and VAT are never both due on the same transaction — which one applies depends entirely on the type of seller.

While you own the property as a non-resident: Non-Resident Income Tax on imputed income

Here’s the surprise most foreign owners don’t see coming: if you own a property in Spain and aren’t a tax resident here, the tax authorities assume that property generates income for you even if you never rent it out or earn a single euro from it. This is known as imputed income, and it must be declared every year under IRNR (Non-Resident Income Tax) using Form 210.

The calculation isn’t based on market value, but on the property’s cadastral value — the administrative value shown on your IBI bill, the annual municipal property tax. A reduced percentage is applied to that cadastral value to arrive at the imputed income, and then the applicable IRNR rate is applied on top. That rate is generally more favorable for residents of the European Union and the European Economic Area than for everyone else. If the property is actually rented out, the treatment changes: tax is due on the real rental income, with expenses deductible only if you’re an EU/EEA resident.

When you sell: the 3% withholding (Form 211) and municipal capital gains tax

The day you decide to sell, two rules specific to non-resident sellers come into play. The first is the 3% withholding: by law, the buyer is required to withhold that percentage of the sale price and pay it directly to the tax authorities using Form 211, rather than handing over the full amount to you. That withholding acts as an advance payment toward the tax you owe on the capital gain from the sale. Afterwards, as the seller, you must file your own Form 210 declaring the actual gain; if the 3% withheld was more than the tax you actually owe, you’re entitled to claim a refund of the difference, and if it was less, you’ll need to pay the shortfall.

The second rule is the municipal capital gains tax, formally known as IIVTNU (tax on the increase in value of urban land). It isn’t administered by the AEAT but by the town hall where the property is located, and it taxes the increase in the value of the land — not the building — over the years you owned it. It’s due whenever that increase exists, regardless of your tax residency, and the town hall typically offers more than one calculation method, letting you choose whichever works out more favorably.

Four taxes, three different authorities (the AEAT, the regional government, and the town hall), and deadlines that don’t bend: that’s the real tax picture for foreigners buying and selling property in Spain. At Zythos Business we bring the same rigor to self-employed professionals and small businesses operating across jurisdictions, turning this maze of forms and authorities into a clear calendar and verified figures — well before any surprises show up.